Chapter 3 Tourism

1. Chapter 3Tourism

2. After Reading and Studying This Chapter, You Should Be Able to: • Define tourism • Outline the important international and domestic tourism organizations • Describe the economic impact of tourism • Identify promoters of tourism • List reasons why people travel • Describe the sociocultural impact of tourism • Describe ecotourism

3. Characteristics • Year-round economic driver • Accounts for 10.2% of world GDP and 7.8% of global workforce • Employer of 214 million people or 7.8% of the global workforce • Spending on tourism is $72.3 billion • Leading producer of tax revenues • Despite Indian Ocean tsunami, SARS, war, and terrorism, WTTC forecasts 4.6% growth between 2006 and 2015

4. Tourism Offers Greatest Global Employment Prospects • Trend factors: • The opening of borders despite security concerns • An increase in disposable income and vacations • Reasonably priced air fares • An increase in the number of people with time and money to travel • More people with the urge to travel

5. The World Tourism Organization States: “Tourism comprises the activities of people traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business, and other purposes.”

6. Tourism Can Be Categorized by the Following Factors: • Geography • Ownership • Function • Industry • Motive

7. Airlines • Change occurred in 1978 • Purpose is to allow a free market of competition (fare structures) • Change in companies and the way airlines are doing business

8. Changes Seen Since September 11, 2001 • Business travelers spend less • Airlines’ fuel costs, pensions, and security costs have risen • Major airlines are laying off employees • Delivery of new jets is delayed • Closing hubs and reservation and maintenance centers to cut costs

9. The Hub-and-Spoke System • Enables passengers to travel from one smaller city to another smaller city via a hub • Hubs are the centers for connections around the world • Benefits: • Airlines can service cities at a lower cost • Airlines can maximize passenger loads from small cities, thereby saving fuel

10. Figure 3-2The Hub-and-Spoke System

11. Cruise Ships • A floating resort • 8.2 million passengers vacationed on a ship in 2003 alone • Most cruise ships sail under foreign flags: • Lower labor cost • U.S. ships are not permitted to operate casino-style gambling • Lower construction costs

12. Figure 3-3Passengers Taking a Cruise Longer Than 2 Days

13. Cruise Market Segments • Mass market • Middle market • Luxury market

14. World and Domestic Organizations • Visit the websites of the following organizations for more information: • World Tourism Organization • International Air Transportation Organization • International Civil Aviation Organization • Organization for Economic Cooperation and Development • Pacific Asia Travel Association • Travel Industry of America • World Travel and Tourism Council

15. Economic Impact of Tourism • International travelers annually spend about $94 billion in the U.S. on travel-related expenses • 20.8 million people are directly employed in the industry • Travel generates $100 billion yearly in tax receipts • Approximately 46 million international travelers visit the U.S. each year • Just a 1% increase in the world market would mean an additional 7.6 million visitors, which would create 150,000 jobs

16. Multiplier Effect • New money spent by tourists is then re-spent by hotels and restaurants in the community for goods and services • Leakage occurs when money must be spent outside the community for goods unavailable within the community

17. Figure 3-5The Multiplier Effect

18. Travel Agencies • Serve as a middle person • Agents use computer reservation systems • Make money on commissions charged to hotels and car rental companies • Charge clients a fee for their services • What does the future hold for travel promoters?

19. Corporate Managers • Work within a large corporation • Can still work with travel agencies • Can also be the “meeting planner”

20. Wholesalers • Consolidated services: • Airlines • Other transportation carriers • Ground service suppliers • Tours • Sold to the public

21. National Travel Offices • National offices: • U.S. now has an NTO • Private organization • Examples of other NTOs: • Canada • Germany • Australia

22. Destination Management Companies • Service organizations • Meet the needs of their clients • Sell destinations • Meeting planners • Incentive companies

23. Reasons People Travel • To experience new and different surroundings • To experience other cultures • To rest and relax • To visit friends and family • To view, or participate in, sporting/recreational activities

24. Reasons for Anticipated Increase in Tourism • Longer life span • Flexible working hours • Early retirement • Greater ease of travel • Tendency to take shorter, more frequent trips • Increase in standard of living

25. Appeal of Travel • Historic and cultural interests • Cuisine • Water sports • Entertainment • Shopping facilities • Sports • Scenic beauty • Pleasant attitudes of locals • Suitable accommodations • Rest and relaxation • Airfare cost

26. Ecotourism • Buzzword • Seeks to minimize the impact of tourism • Natural environment and native cultures

27. Trends in Tourism • Ecotourism • Number of tourist arrivals will continue to increase, topping 1 billion by 2010 • Governments will continue to recognize importance of tourism • Increase in number of bilateral treaties

28. More Trends • Internet booking will increase • Technology will continue to advance • Marketing partnerships and corporate alliances will continue to improve • Ticketless air travel will become commonplace • Managing destinations has become a challenge • Increase in number of “boutique” airlines • Increase in use of automatic airport check-ins

29. Even More Trends… • Continued expansion in the cruise industry • More alternate cruises • Increased concern for health and safety of travel and tourism • Increase in “nature” tourism